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Drought Causing $2.7 Billion Economic Hit In California

Gregory Urquiaga / File / UC Davis

FILE: Dry fields and bare trees at Panoche Road, looking west, on Wednesday February 5, 2014, near San Joaquin, California

Gregory Urquiaga / File / UC Davis

The drought this year will cost California’s economy more than $2.7 billion and could result in nearly 21,000 job losses, according to a UC Davis study.

The study released today shows farmers will idle more than 540,000 acres in 2015, about 114,000 more than in 2014. Almost 99 percent of the idled land is in the Central Valley. Direct agricultural costs of the drought will be about $1.8 billion and result in 10,100 seasonal job losses.

But the report finds agriculture is still fairly robust. 

"It surprised me a little bit how slowly the deterioration of agriculture is progressing," says report co-author Jay Lund with the UC Davis Center for Watershed Sciences.

He says a lot of that has to do with the use of groundwater to offset the shortage in surface water, and the increase in high-value crops.

"The very good global prices for agricultural commodities from California is really helping us a lot, but I think to prepare us for future droughts, we really need to pay attention to groundwater."

The study says if California’s drought continues into 2017, the effect on the economy is likely to be about six percent worse than this year.



Crop revenue losses are expected to reach $902 million this year. But some regions of the state will experience a harder economic hit, particularly in areas with limited groundwater supplies.



Change in crop revenue based on Economic Analysis of the 2015 Drought For California Agriculture by UC Davis Center For Watershed Sciences, ERA Economics, UC Agricultural Issues Center.


The Tulare basin has the most idled land due to its lack of groundwater. In 2014, Tulare County’s crop value reached $8 billion and is still the nation’s number one agricultural county. But the UC Davis study says it’s also likely to see its crop value decrease by about $604 million this year, the steepest decline in the state. The Sacramento region’s estimated crop revenue is expected to decrease by $289 million.

Aug. 2014 Final Drought Report by Capital Public Radio

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